We made a choice as a nation. We could continue temporarily borrowing at basically a zero-percent interest to get our economy back on track, or we could cut down on our borrowing to languish in what could become a lost decade.

The Congressional Budget Office on Tuesday projected a federal budget deficit of $845 billion in 2013, the first time it has fallen below $1 trillion under President Obama.

The reduction in the budget deficit comes after Congress approved higher tax rates on households with annual income above $450,000. But the long-term forecast from the non-partisan CBO shows the fiscal cliff deal that prevented higher tax rates on most households did little to help the nation’s long-term budgetary outlook.

CBO sees the deficit falling to $430 billion by 2015 before slowly rising again. By 2023, CBO projects the nation will be nearing the $1 trillion mark with a $978 billion budget deficit as the aging population and rising health costs explode entitlement spending.

CBO also projects weak economic growth for 2013 and a high unemployment rate above 7.5 percent through 2014 in its annual fiscal outlook published on Tuesday. That would mark the sixth straight year with a jobless rate above 7.5 percent, the longest stretch in 70 years.

CBO sees the economy growing at a weak 1.4 percent rate in 2013. It says that growth would be 1.5 percentage points greater if automatic spending cuts known as the sequester were turned off, if a 2 percentage point payroll tax break were reinstated and if tax increases instituted last month on wealthier taxpayers were voided.

The House and Senate point persons on the budget offered typically disparate reactions to the CBO report.

House Budget Committee Chairman Paul Ryan (R-Wis.) said the CBO report shows that the country is still on the path to a debt crisis and needs to get serious about spending cuts now.

“The CBO’s report is yet another warning that we need to get spending under control. The deficit is still unsustainable. By 2023, our national debt will hit $26 trillion. We can’t let that happen," he said. Ryan noted that President Obama is late in producing his budget for 2014.

“House Republicans have offered their solutions. Now the President and Senate Democrats must do the same," he said.

“Today’s CBO outlook confirms that the economic recovery remains fragile and we can’t afford to lose focus on job creation and economic growth," she said. “The outlook also highlights the danger to the economy if sequestration takes effect as scheduled on March 1st. It’s clear that sequestration is an irresponsible way to reduce the deficit, and I hope that Republicans are truly willing to work with us on a balanced and bipartisan replacement that doesn’t place the entire burden on the middle class and most vulnerable families and that calls on the wealthy to pay their fair share.”

Automatic spending cuts known as the sequester are set to begin in March, though Obama on Tuesday urged Congress to prevent most of them.

Economists at CBO do see the economy rebounding strongly in 2014 with 3.4 percent growth. Unemployment would get down to 5.5 percent by 2018, CBO says.

The 2013 growth numbers are rosier than those CBO projected in August when the fiscal cliff loomed and CBO saw the economy contracting by 0.5 percent in 2013.

CBO estimates the government will add $6.96 trillion in deficit spending over the next ten years under current law.

The fiscal cliff deal added $3.9 trillion in deficits over the next ten years, CBO said.

The CBO has projected budget deficits below $1 trillion under Obama before, but only if all of the Bush-era tax rates were allowed to expire. Assuming those tax hikes, for example, the CBO last year projected the deficit would fall to $641 billion. Such a scenario was unlikely, however, given opposition from Obama and Republicans in Congress to raising taxes on the middle class.

The CBO budget baseline, which will form the yardstick used by lawmakers during coming fiscal debates this year, assumes that nearly $1 trillion in automatic spending cuts over nine years is allowed to take place and that a radical cut to doctor payments under Medicare is allowed to occur, among other assumptions.

Assuming Congress simply turns off the sequester cuts and passes a “doc fix” without paying for it, among other actions, would add a total of $9.5 trillion in new deficits over ten years.

Economic growth and recent legislation have cut the federal budget deficit in half in the past four years ... the Congressional Budget Office said Tuesday in the annual update of its budget and economic forecast.

The CBO said it expected economic growth to be sluggish in 2013, in part because of a sharp drop in government spending, but it sees a better economy in 2014 as the recovery takes hold.

The federal deficit for the fiscal year ending Sept. 30, 2013, is projected to fall to $845 billion, or 5.3% of gross domestic product, said the CBO, which produces nonpartisan reports on the budget and economy for Congress. That is down sharply from the past four years, which each had deficits exceeding $1 trillion. The 2012 deficit amounted to 7% of GDP.

The CBO projects the deficit will decline to 3.7% of GDP in fiscal 2014, and 2.4% of GDP in fiscal 2015.

This graph shows the actual (purple) budget deficit each year as a percent of GDP, and an estimate for the next ten years based on estimates from the CBO.

After 2015, the deficit will start to increase again according to the CBO, but as I've noted before, we really don't want to reduce the deficit much faster than this path over the next few years, because that will be too much of a drag on the economy.

CBO sees the deficit falling to $430 billion by 2015 before slowly rising again. By 2023, CBO projects the nation will be nearing the $1 trillion mark with a $978 billion budget deficit as the aging population and rising health costs explode entitlement spending.

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"I love signature blocks on the Internet. I get to put whatever the hell I want in quotes, pick a pretend author, and bang, it's like he really said it." George Washington

Why would this surprise anyone? When our government has a facist relationship with the private sector, any lowering of spending on their behalf will hurt the economy. This is great 'statistics' for those in this forum addicted to the narrative that the government is our mommy, but for those who actually think the bureaucrats in Washington have zero clue on what's best for the economy and only looking out for THEIR interests, it is expected and entirely predictable.

As government becomes even MORE broke, the worse it will get. Time to break the two-way embilical cord.

__________________The welfare of humanity is always the alibi of tyrants

Why would this surprise anyone? When our government has a facist relationship with the private sector, any lowering of spending on their behalf will hurt the economy. This is great 'statistics' for those in this forum addicted to the narrative that the government is our mommy, but for those who actually think the bureaucrats in Washington have zero clue on what's best for the economy and only looking out for THEIR interests, it is expected and entirely predictable.

As government becomes even MORE broke, the worse it will get. Time to break the two-way embilical cord.

I hope you left breadcrumbs on the ground to lead you back to reality.